Real Estate and Housinghttp://www.wisebread.com/taxonomy/term/4810/all
en-USSurprise! There's a Gender Gap in Mortgages, Toohttp://www.wisebread.com/surprise-theres-a-gender-gap-in-mortgages-too
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<p>The gender gap in earnings is well known. According to a recent report by the Economic Policy Institute, the typical woman can expect to earn 83 cents for every dollar that the typical man earns.</p>
<p>But studies show another gender gap that negatively impacts women: Research published by the Urban Institute in September said that women tend to pay more for their mortgages even though they are statistically more likely to pay their loans on time than men.</p>
<h2>The Numbers</h2>
<p>According to the Urban Institute, about 15.6% of female borrowers have what is known as a &quot;higher-priced mortgage.&quot; Borrowers with such mortgages are charged higher interest rates to borrow their home-loan dollars.</p>
<p>How high these rates are at any given time varies. The Urban Institute uses the same definition of higher-priced mortgage used by the Home Mortgage Disclosure Act: a mortgage loan with an annual percentage rate that is higher than the benchmark interest rate known as the Average Prime Offer Rate. That rate stood at 3.58% for a 30-year fixed-rate loan as of June 20 of this year.</p>
<p>The Consumer Financial Protection Bureau considers a first mortgage loan to be a higher-priced mortgage if its annual percentage rate is 1.5% or more higher than the Average Prime Offer Rate.</p>
<p>The Urban Institute found that while 15.6% of female-only borrowers are paying off higher-priced mortgages, just 15% of male-only borrowers are doing the same. The institute found that male-female borrowers who apply for loans together receive higher-priced mortgages only 7.6% of the time.</p>
<h2>Why Are Women Paying More?</h2>
<p>Why do single women pay more for their mortgages? It's difficult to tell. It might come down to income. The Urban Institute reported that single female borrowers tend to have lower annual incomes than single males. According to the institute, single female borrowers earned an average of $69,200 a year. Single male borrowers had an average income of $94,700. Male-female borrowers had an even higher annual income of $119,000.</p>
<p>Income is one of the financial factors that lenders consider when deciding who qualifies for a mortgage and what interest rates they pay. Lenders often charge higher rates as a form of financial protection when they worry that borrowers' incomes are lower, because they fear that these borrowers will be less likely to pay their loans back on time.</p>
<p>Borrowers with lower incomes also have less money for a down payment. When borrowers put down less for a house, they are typically charged a higher interest rate, again to make up for the extra risk that lenders take on when loaning them money. Lenders assume that borrowers who put less money down are more likely to stop paying their mortgage loan if they suffer a financial crisis.</p>
<p>But what about FICO credit scores? These three-digit numbers tell lenders whether borrowers have a history of paying their bills on time or if they tend to miss payments and run up credit card debt. Lenders charge higher interest rates to borrowers with low credit scores.</p>
<p>But from 2004 to 2014, the Urban Institute found, female-only borrowers had an average FICO credit score of 711, similar to the average 712 score of male-only borrowers. That score is significantly lower, though, than the 725 average score submitted by joint male-female borrowers.</p>
<p>Credit bureau Experian reported in March of this year that the average FICO credit score for all women is 675, a bit higher than the average score of 670 for men. Women also had 3.7% less average debt than men, according to Experian.</p>
<h2>Better Record</h2>
<p>Despite paying more for their mortgages, female-only borrowers tend to do a slightly better job of paying them on time than do male-only borrowers. According to the Urban Institute, female-only borrowers had a default rate on their loans of 9.6% from 2008 through 2010. Male-only borrowers had a slightly higher default rate of 9.7% during this same time.</p>
<h2>What to Do?</h2>
<p>What does all this mean for women applying for mortgage loans? If they are applying for mortgages on their own and want the lowest interest rates possible, they need to make sure that their finances are strong.</p>
<p>This means that their FICO credit score should be at least 740 if they want to qualify for the lowest interest rates. It also means that their monthly debts, including their estimated new mortgage payment, should be 43% or less than their gross monthly income.</p>
<p>Single male borrowers need to focus on the same factors, of course. But the research from the Urban Institute indicates that strong FICO scores and debt-to-income ratios are especially important for single females who want to avoid the financial burden of a higher-priced mortgage.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/surprise-theres-a-gender-gap-in-mortgages-too">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and Housinggenderhome loansinterest ratesmortgage gapwage gapwomenTue, 29 Nov 2016 11:00:09 +0000Dan Rafter1834563 at http://www.wisebread.comRent Your Home or Buy? Here's How to Decidehttp://www.wisebread.com/rent-your-home-or-buy-heres-how-to-decide
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<p>There are plenty of advantages to renting an apartment, and just as many to buying a home, instead. But what about financially? Is renting or buying the smarter money move?</p>
<p>Not surprisingly, the answer is complicated, and depends on where you live, what kind of home you want to buy or apartment you want to rent, and how long you plan on staying in one place. Here's a look at the numbers that might help you solve the rent-vs.-buy puzzle.</p>
<h2>Prices Are Rising for Buyers and Renters</h2>
<p>Renting an apartment is more expensive today than it was even a year ago. But the same is true of buying a home.</p>
<p>Consider the cost of buying a home. The National Association of Realtors reported that in September of this year, the median price of existing homes stood at $234,200.</p>
<p>You won't necessarily have to pay $234,200 or more, depending on where you buy. But the median sales price continues to increase, meaning that home prices overall are on the rise. The median price in September was up 5.6% from the same month one year earlier, when it was $221,700. And don't expect median prices to fall anytime soon. The association says that September's price increase represents the 55th consecutive month of year-over-year gains.</p>
<p>And what about renting? Apartment rents continue to rise, too. ApartmentList reported that in November of this year, the median national rent for one-bedroom apartments was $1,110 a month. For two-bedroom apartments that figure was $1,270. The good news is that median rents actually fell in 55 out of the country's 100 biggest cities from October to November, according to ApartmentList.</p>
<p>The bad news? Rents are still higher today than they were one, two, or three years ago. According to ApartmentList, the median national rent was 2% higher in November of this year compared with the same month one year earlier.</p>
<p>So no matter if you rent or buy, know that prices are generally rising.</p>
<h2>Which Is More Affordable?</h2>
<p>That leads to the big question: Given that both buying a home and renting an apartment are getting more expensive, which option is most affordable?</p>
<p>The answer to this question includes plenty of variables. For instance, owning a home provides a tax benefit: You can deduct the interest you pay on your mortgage loan each year up to $1 million, resulting in a lower tax bill. But even this isn't a crystal-clear financial plus for all owners. You can only claim your mortgage interest deduction if you itemize your taxes. And if that interest deduction isn't higher than the IRS' standard deduction &mdash; which stood at $12,600 for married couples filing jointly and $6,300 for singles in 2016 &mdash; there is no real reason for you to itemize your taxes and claim the deduction.</p>
<p>Then consider the variables of going the apartment route: You might be able to find an apartment with low rent. But that apartment might not be located where you actually want to live, especially if you want to live in the center of a large city. Apartments in urban areas tend to come with higher rents today.</p>
<p>And if you do find a cheaper apartment, it will almost certainly not be a newer one. RENTCafe found that in 2015, 75% of all large new apartment properties built across the country were high-end luxury properties, buildings that charge far higher monthly rents. Most of these new apartments are being built in the center of big cities, too, according to RENTCafe.</p>
<p>So if you want to rent an apartment in San Francisco? ApartmentList says that a two-bedroom apartment here had a median price of $4,700 a month in November, while a one-bedroom had a median monthly rent of $3,440. In Boston, two-bedrooms rented for a median price of $2,350 a month, while in Seattle it cost a median of $1,720 for a one-bedroom unit and $2,300 for two bedrooms.</p>
<p>Given this jumble of numbers, is it cheaper to rent or buy? According to real estate website Trulia, buying a home is cheaper on a national basis. Though, not surprisingly, there are some caveats.</p>
<h2>Nationally, Buying Is Cheaper</h2>
<p>Trulia reported in October that buying a home was 37.7% cheaper than renting on a national basis. But that 37.7% figure only holds true for those who live in their homes for at least seven years and can afford to come up with a down payment of 20% on their homes.</p>
<p>Given that standard, Trulia reports that buying is cheaper than renting in each of the 100 largest metropolitan areas of the country. According to Trulia, for example, it is 50% cheaper to buy in Miami and just under 20% cheaper to buy in San Francisco and Honolulu.</p>
<p>Part of the reason that buying is more affordable comes down to mortgage interest rates. Rates are still at historically low levels, with the Freddie Mac Primary Mortgage Market Survey reporting that as of Nov. 10, the average interest rate on a 30-year fixed-rate mortgage loan stood at 3.57%. This makes borrowing money for a mortgage loan more affordable.</p>
<p>Want to see what Trulia thinks of the rent-vs.-buy decision in your community? Visit the site&rsquo;s <a href="https://www.trulia.com/rent_vs_buy/">rent-vs.-buy calculator</a>, punch in your metropolitan area and wait for the results.</p>
<h2>What Should You Do?</h2>
<p>These numbers, and Trulia&rsquo;s rent-vs.-buy calculator, should serve as a general guide. But they alone can't tell you whether you should rent or buy. That's because everyone's situation is unique.</p>
<p>Say you only plan to live in an area for three or four years before moving. Renting is almost always the better financial move. Say you hate the thought of mowing a lawn for 15 years. Again, renting might be the better choice, even if it is more expensive than owning a home. If you dream of gardening in your own backyard? Then buying might make you happier.</p>
<p>Your best bet is to carefully analyze what you want out of a home, whether it's the stability of owning and building equity or the freedom that comes with renting. Then make your decision based on what type of home will best meet your needs.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/rent-your-home-or-buy-heres-how-to-decide">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2">
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</div> </div><br/></br>Real Estate and Housingapartmentscost of livinghomeownershipmortgagesrent vs buyrentingTue, 22 Nov 2016 11:00:15 +0000Dan Rafter1835351 at http://www.wisebread.comWatch Out for These 5 Last Minute Home Buying Costshttp://www.wisebread.com/watch-out-for-these-5-last-minute-home-buying-costs
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<p>In 2015, 5,250,000 existing homes and 510,000 newly constructed properties were <a href="http://www.realtor.org/field-guides/field-guide-to-quick-real-estate-statistics">sold in the U.S</a>. And as Wise Bread predicted back in December 2015, homes have been one of the <a href="http://www.wisebread.com/8-necessities-that-will-be-cheaper-in-2016">necessities that are cheaper in 2016</a>, boosting the percentage of first-time homebuyers entering the market.</p>
<p>But unexpected costs toward the end of the buying process can leave prospective buyers scrambling at the last minute or, even worse, unable to land the home of their dreams. Let's take a look at five pesky home buying costs that could appear at the eleventh hour.</p>
<h2>1. Lower Property Appraisal</h2>
<p>The seller told you that the home is worth $350,000 and you earnestly believed that valuation. So, you went to the bank and applied for a mortgage based on the market value of $350,000. To meet compliance requirements and to do its due diligence, the bank includes an appraisal contingency in your mortgage application. This clause requires that a third-party appraiser verifies that the home is actually worth $350,000.</p>
<p>If the appraisal requested by your bank were to come under the $350,000, then somebody would have to come up with the difference for the bank to approve the loan. Depending on several factors, including the number of days the house has been on the market and the skill level of your real estate agent, the seller, her agent, or your own agent may help you with the difference. In the worst case scenario, you'll have to come up with the difference or have to say goodbye to that home.</p>
<p>In the event that you believe the third-party appraiser may have provided an inaccurate estimate, you could hire another appraiser, submit that new estimate to the bank, and let the bank re-evaluate the mortgage. However, you would be most likely responsible for the cost of that second appraisal.</p>
<h2>2. Mortgage Insurance</h2>
<p>Let's imagine that you are in the process of saving for a decent down payment for your first home. Two years before you reach your savings goal, a home is finally available in your dream neighborhood. Your broker is confident that a similar home won't be available for another five years, so he suggests that you buy. The catch: You can't come up with at least 20% of the home value for a down payment.</p>
<p>When you pony up less than a 20% down payment to buy a home, you'll have to pay private mortgage insurance (PMI). The <a href="https://www.federalreserve.gov/boarddocs/supmanual/cch/hpa.pdf">Homeowner's Protection Act</a> requires homebuyers who finance more than 80% of a new home's value to purchase PMI. Keep in mind that this is protection for the lender (not you!) in case you default on your mortgage.</p>
<p>The average PMI payment ranges from 0.5% to 1% of the total value of the home loan. Still, this cost isn't small potatoes. In 2015, the average value of a mortgage in the U.S. was $172,341. Assuming a 1% PMI, the average PMI payment in 2015 was about $1,723. That would be one cost that you would have to pay year after year until your loan value reaches 78% of the original market value of the secured property.</p>
<p>Still, your lender may have a strong case to continue requiring the PMI in the event of a dramatic price drop in the market value of your home, an existing home equity line of credit (HELOC) on your property, or a long string of late monthly payments within the last two years.</p>
<h2>3. Dramatic Change in Financial Situation</h2>
<p>When you're in the process of buying a home, you should keep a consistent financial picture, especially with your credit score. So, delay buying all those expensive new kitchen appliances, pieces of furniture for your living room, and blue period art pieces on credit until you have the keys in hand. A dramatic change to your credit score is a major red flag for the lender and the financial institution may decide to offer the mortgage at a higher interest rate than originally expected &mdash; or turn down the loan entirely.</p>
<p>Here are other financial do's and don'ts until settlement day:</p>
<ul>
<li>Do keep a good paper trail of the source of your down payment;<br />
&nbsp;</li>
<li>Don't make large transfers between your accounts;<br />
&nbsp;</li>
<li>Do delay any other large purchases on credit, such as a car;<br />
&nbsp;</li>
<li>Don't miss any monthly payments on existing debt (they account for 35% of your credit score!);<br />
&nbsp;</li>
<li>Do provide all documentation requested by your lender and agent within the stipulated time frame;<br />
&nbsp;</li>
<li>Don't open new credit or store cards.</li>
</ul>
<h2>4. Repairs</h2>
<p>When you receive the report from a licensed home inspector, you may find that your dream home is not so dreamy after all. Take the comments from the inspector seriously and determine whether it's worthwhile to ask the seller to incur some of those costs, or to provide a financial remedy. After all, you'll be the one covering all of them once the home is yours.</p>
<p>However, choose your fights wisely. No home is 100% perfect. Having to replace all door handles because you find them out of style isn't nearly as bad as having to battle black mold in the basement of your soon-to-be home.</p>
<h2>5. Special Case: Hike in Homeowner's Association Fees</h2>
<p>Last but not least, make sure to review the minutes of the meetings of the homeowner's association (HOA) for your property for at least the last six months.</p>
<p>Pay special attention to two items.</p>
<p>First, look for a schedule of upcoming monthly dues. In some cases, you may be welcomed with a higher-than-expected bill right off the bat.</p>
<p>Second, watch out for any large projects that are under current review by the board of the HOA. For example, installing a complex system of solar panels on the roof or replacing all the windows of the apartment building because existing windows no longer meet city codes could both mean an ever-growing monthly HOA due. In certain circumstances, the HOA board could be planning to present you the option to pay your entire pro rata amount for the project or to finance the cost through the HOA's loan. Either option would put a dent on your monthly budget.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/watch-out-for-these-5-last-minute-home-buying-costs">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and Housingappraisalshidden costshoa feeshome buyinghomeownershipinsurancelast minute costsmortgagespmirepairsFri, 18 Nov 2016 11:30:10 +0000Damian Davila1835252 at http://www.wisebread.comShould You Pay Your Mortgage Off Early?http://www.wisebread.com/should-you-pay-your-mortgage-off-early
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<p>Hate sending that big payment to your mortgage lender each month? You're certainly not alone. But what if you had the ability to pay off that mortgage loan early, either by paying extra dollars toward your loan's principal balance or by paying off the rest of your mortgage in one giant payment?</p>
<p>Should you do it? Or are there times when <em>not </em>paying off your mortgage early actually makes sense?</p>
<p>Not surprisingly, it depends on a host of factors. Here is what you should look at when determining whether paying off your mortgage early is the best choice.</p>
<h2>Tax Benefits</h2>
<p>When arguing against paying off your mortgage early, most people point to the mortgage interest deduction. This allows most homeowners to deduct annual mortgage payments.</p>
<p>There is a catch here, though: You can only claim the mortgage interest deduction if you itemize your taxes. And you should only itemize if your deductions are higher than the IRS' standard deduction, which as of 2016 stood at $12,600 for married couples filing jointly and $6,300 for singles and married people who file separately.</p>
<p>This means that those homeowners most likely to benefit from the deduction are those who have purchased higher-priced homes, have a high interest rate on their mortgage, or are in the very early stages of paying off that mortgage. For other homeowners, the deduction will either be less than or barely more than their standard deduction.</p>
<p>This means that you'll need to determine &mdash; perhaps with the help of your accountant or financial adviser &mdash; whether the mortgage interest deduction is really helping you at your current stage of paying off your mortgage. If it is, then factor this benefit in when determining whether you should pay off your mortgage early. But if it's not? Then don't let the promise of a yearly tax deduction influence your choice.</p>
<h2>Other Debt</h2>
<p>According to Freddie Mac's Primary Mortgage Market Survey, the average interest rate on a 30-year fixed-rate mortgage stood at 3.54% as of Nov. 3. The average rate for a 15-year fixed-rate mortgage was an even lower 2.84%. Those are both extremely low interest rates.</p>
<p>At the same time, financial website Bankrate reported that the average variable interest rate for credit cards stood at 16.28% as of Nov. 2.</p>
<p>The message here is clear: If you are burdened with high-interest credit card debt, and you have enough money to spend extra on your mortgage loan or pay it off entirely, it makes more sense to put those extra dollars toward your credit cards.</p>
<p>It makes financial sense to pay off debt that comes with higher interest rates first. It might feel good to make that big monthly mortgage payment disappear, but it's smarter to whack away at your <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?ref=internal">credit card debt</a>, which, thanks to high interest rates, can grow quickly each month.</p>
<p>Before deciding to pay extra on your mortgage or pay it off entirely, look at your other debt first: Use your extra money to eliminate the debt that is costing you the most each month.</p>
<h2>Are You Staying Put or Moving?</h2>
<p>How long do you plan on staying in your home? Do you plan on living out the rest of your days there? Or are you already planning a move in five to seven years?</p>
<p>It makes more sense to pay extra on your mortgage loan if you plan on staying in your home for a longer period of time. By paying extra each month, you can shave thousands of dollars off the amount you'll pay in interest during the life of your mortgage.</p>
<p>But if you plan on moving in five years, paying extra doesn't make as much sense. You'll sell your home long before you come close to paying it off. So if you're not going to be a long-term resident of your current home, put that extra money to better use.</p>
<h2>Are You an Investor?</h2>
<p>Those who argue against spending extra on your mortgage say that most homeowners would be better off taking those extra dollars and investing them. This goes back to the low interest rates attached to mortgages today. If you are only paying an interest rate of 3.5% on your home loan, why wouldn't you keep that debt and instead invest in the stock market, where you could make a return of 7% or more on that money?</p>
<p>This assumes, though, that you'll actually invest the money that you won't spend on your mortgage loan. If you're more likely to spend it instead, you're better off paying down your mortgage or even paying it off early.</p>
<h2>Retirement</h2>
<p>Are you close to retirement? You might want to pay off that mortgage early. It's best to enter retirement with as few monthly payments as possible. If you plan to stay in your home after retiring, paying off that mortgage early makes sense. You are then free to use that money that you would have sent to your lender each month however you choose.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and Housingdebthomeownershipinterest ratesmortgagespaying off earlyretirementtax benefitsWed, 16 Nov 2016 10:30:27 +0000Dan Rafter1833769 at http://www.wisebread.comEverybody's Wrong About How Much House You Can Affordhttp://www.wisebread.com/everybodys-wrong-about-how-much-house-you-can-afford
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<p>A home is one of the most expensive &mdash; and most emotional &mdash; purchases you'll ever make. That high cost and high emotion combination can be dangerous, tempting you to spend so much on a house that it ends up owning <em>you</em>.</p>
<p>Instead, buy a house you can actually afford. What is a reasonable cost, you might ask? For starters, ditch the conventional homeownership wisdom, and consider this plan to help you buy a home you can truly afford.</p>
<h2>A Reasonable Percentage</h2>
<p>I've spent a lot of time crunching numbers to come up with <a href="http://www.mattaboutmoney.com/resources/">recommended cash flow guidelines</a>, showing how much various sized households with various levels of income can afford to spend on everything from clothing to vacations. All that spreadsheet time gave me more than a headache; it gave me a deep appreciation for the importance of keeping housing costs under control.</p>
<p>Here's what I found: If you're going to be able to save for emergencies and near-term purchases, invest for longer-term needs such as retirement or your kids' college costs, live generously, and enjoy some financial breathing space, you have to keep your total housing costs (mortgage, property taxes, homeowner's insurance, and association fees, if applicable) to no more than 25% of monthly gross income. Preferably, no more than 20%.</p>
<p>Even more radically, I recommend that two-income couples run the numbers on what they can afford based on just <em>one</em> of their incomes.</p>
<p>I know this all probably sounds ludicrous, but hear me out.</p>
<h2>But I Qualify for More!</h2>
<p>Mortgage lenders will typically allow you to devote 28% of your gross income to housing costs. They assume you'll have other debts as well and will be fine with that as long as it takes no more than 36% to 40% of your gross income to cover your housing costs and these other debts.</p>
<p>But mortgage lenders aren't the ones who'll be making the payments. You will.</p>
<p>Keeping your monthly housing costs within the parameters I suggested, and holding no other debt, will do wonders for your solvency and stress level.</p>
<h2>Why Not Use Two Incomes?</h2>
<p>If you're a double-income household, think twice before basing your housing decision on both incomes.</p>
<p>If you don't have kids but would like to someday, and if one of you would like to step out of the paid workforce for a period of time in order to be home with your kids, it'll be a lot easier to transition to that life if your home doesn't require two incomes.</p>
<p>That was the single best financial advice my wife and I received before we got married. Following that advice meant renting for the first 10 months of our marriage and then buying a condo in what our realtor optimistically described as &quot;an up and coming neighborhood&quot; in Chicago.</p>
<p>After our first child was born and my wife left her job to be home full-time, the financial transition wasn't very difficult at all.</p>
<p>The key to getting acclimated to living on one income is not getting acclimated to living on two incomes in the first place.</p>
<p>If you don't plan to have kids, or if you do but you both plan to continue working full-time, it can still be dangerous to buy a house that requires two incomes. What if one of you loses your job?</p>
<p><em>Choosing</em> to transition from two incomes to one because one parent wants to stay home for a period of time is one thing. Being <em>forced</em> to make that transition because one spouse goes through an extended time of unemployment is far more painful.</p>
<h2>What If You Already Have a Two-Income House?</h2>
<p>Very often, when people say they can't afford to save, invest, or support charitable causes they care about, it's because they're spending too much on housing.</p>
<p>If you're in that situation, consider something radical. Consider moving to a home you can more easily afford.</p>
<p>There's nothing easy about moving. I realize that. But I know two couples that have sold homes they realized they really couldn't afford. In both cases, moving was difficult, time-consuming, and even embarrassing. But both couples are so happy to have made the move. It's been better for their finances and their marriages.</p>
<p>Keeping your housing costs reasonable is an essential part of wise money management. That means keeping your housing costs to no more than 20% to 25% of monthly gross income &mdash; and preferably basing that on one income. It's a radical idea, but it may just enable you to enjoy your home without financial worries. And that's worth more than extra square footage any day.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/everybodys-wrong-about-how-much-house-you-can-afford">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and Housingaffordabilitybuying a housecash flowexpensesincomesmortgagesnew housesingle incomeWed, 09 Nov 2016 09:30:07 +0000Matt Bell1827232 at http://www.wisebread.comHere's How Much Life in the Big City Will Cost Youhttp://www.wisebread.com/heres-how-much-life-in-the-big-city-will-cost-you
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<p>So, you got a new higher-paying job in the big city. Now you have to decide whether it's worth making the big move. Fortunately, there's an easy cost analysis that can help you determine if the move is worthwhile.</p>
<h2>Cost of Living Calculators</h2>
<p>For a better estimate of how much you'll need to earn to maintain the same standard of living, use a cost of living calculator. Once you enter your current income, where you currently live, and where you would like to move, you can see a side-by-side comparison of what it will cost to live in both cities.</p>
<p>Some <a href="http://money.cnn.com/calculator/pf/cost-of-living/">basic calculators</a> will show how far your salary will go in another city by comparing the price differences of major categories, like housing, utilities, and groceries. There are also more advanced cost of living calculators that will break down everything from what gas costs in the two areas, to how much you pay for coffee and ibuprofen.</p>
<p>For example, say you're living somewhere like Bakersfield, California with an income of $50,000, and you're deciding whether to move to a big metro like San Francisco. So, how much will you need to earn in order to maintain your same standard of living? Using a cost of living calculator, you can see that you would need to be making $81,636. Otherwise, you'll have to get used to a lower standard of living and cut costs wherever possible.</p>
<h2>Housing</h2>
<p>Generally speaking, the closer you live to downtown, the more expensive the rent, food, and entertainment costs. When you live in a bigger city, it also generally means that you will have a smaller living space. Worst of all, rent just keeps getting more expensive over time. According to StreetEasy's annual New York City Rent Affordability Report, the median rent-to-income ratio in NYC rose from 59.7% in 2015 to <a href="http://cdn1.blog-media.zillowstatic.com/streeteasy/2/StreetEasy-2016-Rent-AffordabilityReport-7e91e8.pdf">65.2% in 2016</a>. This means that nearly two-thirds of New Yorkers' income is devoted to rent. (See also: <a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford?ref=seealso">The Simple Way to Decide How Much Rent You Can Really Afford</a>)</p>
<h2>Higher Income</h2>
<p>In most cases, a higher cost of living also means that the area has a higher than average median household income. While you can usually get a more robust <a href="http://www.wisebread.com/protect-future-earnings-by-negotiating-the-right-starting-salary">starting salary</a> in a large city, you might not want to count on hefty raises. Income growth is lagging behind things like rent increases and cost of living growth, so your expenses may increase in the years to come, but your income might not keep up.</p>
<h2>Transportation</h2>
<p>In most cases, the closer you can live to work, the better. This will allow you to bike to work, take part in a carpool, use Uber, or even take public transportation.</p>
<p>If you will be taking advantage of public transportation, consider storing or selling your car, so you don't have to worry about parking. Driving can also be a lot more overwhelming for someone moving from a smaller town to a big metro (think Los Angeles gridlock). Look into public transportation options in your new city to determine if you can reasonably live there without a car, and how much you would save by making the change to public transportation. Keep in mind that places that are more walkable, or have better transportation options, are typically more expensive to rent.</p>
<h2>Parking</h2>
<p>In cities like Los Angeles, New York, San Francisco, and Seattle (to name a few), free parking is basically a pipe dream. With parking meters and paid parking lots as far as the eye can see, it's very unlikely that you'll find free parking. Even if you did find street parking, the posted rules can be very confusing and, in large cities, parking tickets are very common.</p>
<h2>Convenience</h2>
<p>Living in a large city means most things will be at your fingertips. For instance, there isn't much that you won't have access to in New York City. However, getting what you want and need is a different story. Living in a small town means quicker trips to the grocery store and general merchandise stores like Target.</p>
<p>In a big city, on the other hand, you have to worry about fighting traffic and finding parking before you even get to the store. Then, there are hordes of people to deal with and long lines at the checkout counter, so small day trips can become much longer and more stressful. Try completing your errands at odd times, like early in the morning or during your lunch break, to beat the crowds.</p>
<h2>Entertainment</h2>
<p>Living in a big city means there are generally boundless things to occupy your time, such as endless places to eat, shows to watch, people to meet, and free activities to take part in. In a city like <a href="http://www.wisebread.com/how-to-visit-san-francisco-without-going-broke-0">San Francisco</a> or <a href="http://www.wisebread.com/how-to-visit-new-york-without-going-broke">New York</a>, you will be exposed to more culture more easily, and can find more fun, free events for the kids.</p>
<p>To better deal with the culture shock, try seeking out social groups and other resources for newcomers to the area. Make a valiant effort after moving to make friends with locals and other transplants so you can quickly become acclimated with the city and what is available to you.</p>
<h2>Is It Worth It?</h2>
<p>Moving to a large city can be very expensive. The move itself can be a frustrating, expensive undertaking, and once you're there, things like rent, groceries, utilities, health care, and transportation can be much more expensive than what you're used to. Take this into account when you're deciding whether to make the move or not.</p>
<p>The decision on whether it is worth it to make the big move is an entirely personal one. After living in New York City, San Francisco, and Los Angeles, I can attest to the fact that there is nothing comparable to living in a big metro. What you can (and will) experience in a shorter amount of time there is well worth the higher cost of living. However, if you are trying to save more money or contribute more towards your debt, savings, or retirement accounts, you'll need to use a cost of living calculator (at minimum) to determine whether it's worth it for you.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/heres-how-much-life-in-the-big-city-will-cost-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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<span class="field-content"><a href="http://www.wisebread.com/moving-dont-skimp-on-these-critical-expenses">Moving? Don&#039;t Skimp on These Critical Expenses</a></span>
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<span class="field-content"><a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security">5 American Cities Where You Can Retire On Just Social Security</a></span>
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</div> </div><br/></br>Frugal LivingReal Estate and Housingbig citiescost of livingexpenseshousingmovingrelocatingrentingtransportationTue, 01 Nov 2016 10:00:15 +0000Andrea Cannon1824619 at http://www.wisebread.com10 Best Tools for Finding an Apartment on the Cheaphttp://www.wisebread.com/10-best-tools-for-finding-an-apartment-on-the-cheap
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<p>Depending on where you live, finding a new apartment can be tough &hellip; or downright overwhelming. Seinfeld once joked that in New York, the obituaries section should be coupled with the property section in a newspaper, because that's pretty much the only way to find a decent place.</p>
<p>But wherever you live, you are going to need help, especially if it's a completely unknown area. What is the neighborhood like? How are the schools? Is the crime rate high? Is the rent too high? The following tools will help you get your foot in the door.</p>
<h2>1. Craigslist</h2>
<p>Do not underestimate the power of Craigslist. Started in 1996 by Craig Newmark, it was originally servicing only the San Francisco Bay Area. Now, it's global, and the &quot;Housing&quot; section still remains free for people to post and respond to listings. There are many subsections, including real estate for sale, vacation rentals, and even office/commercial storage. However, you will want to look into the following categories:</p>
<ul>
<li>Apt/housing</li>
<li>Housing swap</li>
<li>Rooms/shared</li>
<li>Sublets/Temporary</li>
</ul>
<p>Once you get into any of those sections, you can narrow down your search with a great list of tools. From basic parameters like price, bedrooms, bathrooms, and square footage, to more niche requirements like &quot;X miles from zip,&quot; wheelchair access, and animals, you can quickly find just the place you're looking for. It is by far the most convenient free tool out there.</p>
<h2>2. Apartment Finder</h2>
<p>Long before the Internet was the go-to place for, well, everything, &quot;<a href="http://www.apartmentfinder.com/">Apartment Finder</a>&quot; magazine was the essential tool for finding your next abode. Started in 1981, it has won numerous industry awards and is now available in several formats, including the traditional magazine, the website, and the app. It also part of a network that includes Apartments.com, ApartmentHomeLiving, Move, and Doorsteps.</p>
<p>As it is a service focused on renting apartments, there are more slick tools here to help. You'll be able to explore the spaces using a 360-degree camera, and you'll get virtual walk-throughs, floor plans, a veritable smorgasbord of photos, and a lot of detailed information. The only downside is that you will not usually find properties from people just looking to rent out their homes. It costs money to advertise on this site, and that means it's populated by large apartment complexes. But if that's what you're looking for, and you need the extra security and benefits of a managed property with a pool and a gymnasium, this is just what you need.</p>
<h2>3. Zillow</h2>
<p>When <a href="http://www.zillow.com/homes/for_rent/">Zillow</a> first came onto the scene, it was primarily used as a tool to estimate your home's value (and real estate agents <em>hated </em>it because the information was always very hit or miss). Now, Zillow has become an excellent free resource for the apartment hunter. Not only does it have all the tools you'd expect to narrow down your search, but it offers advice on renting and house hunting, as well as important neighborhood information (essential if you know nothing about an area you're moving into), including school ratings. Again, it costs to list a rental property on this kind of site, so don't expect to find little hidden gems being offered by someone who has a second home.</p>
<h2>4. Rentometer</h2>
<p>Although it won't help you find the specific place you want to live in, it will help you research what you should (and should not) be paying for rent at any of the apartments you're checking out. If you find the home of your dreams, but aren't sure if the price is sky high, <a href="https://www.rentometer.com/">Rentometer</a> will give you a temperature check of the area. You'll see the average and median prices, and also which percentile the apartment you're looking at falls in. At the very least, you want &quot;reasonable&quot; rent. Low is great. If you're in the red zone, negotiate or move on.</p>
<h2>5. The Library</h2>
<p>So your local library is not an app or a website, obviously, but it is filled with resources that can help anyone find their perfect apartment. It's a shame that more people don't take full advantage of the library; after all, we all pay for libraries with our taxes. Libraries have computers to access the many online tools listed in this article. They also have copies of a plethora of local and national newspapers, which contain classified ads for apartments and homes. If you find yourself in need of a place that contains many tools under one roof, the library is hard to beat.</p>
<h2>6. HotPads</h2>
<p>If you're looking for a tool that combines the great functionality of sites like Apartment Finder and Zillow, but also has the variety of smaller rentals offered by Craigslist, the <a href="https://hotpads.com">HotPads</a> is definitely for you. It has listings for most major cities in the U.S., and gives you a great set of criteria to help you get a list of excellent matches. Features like the &quot;walk score&quot; and neighborhood information, coupled with &quot;hot listings&quot; that show you which apartments are getting the most attention make HotPads one of the best tools for anyone looking to rent in a well-populated location.</p>
<h2>7. Rent.com</h2>
<p>Just like HotPads, <a href="http://www.rent.com/">Rent.com</a> gives you great choice. You can find landlords who are renting out just one or two properties, or giant apartment complexes with hundreds of units in one place. You can sort by best match, price, rating, or alphabetically, and when you narrow it down to a few properties, you can check the availability and book a tour. Definitely sort by ratings, because some of apartments have quite a few skeletons in the closet.</p>
<h2>8. PadMapper</h2>
<p>If you want to imagine what an apartment hunting app crossed with a mapping tool would look like, check out <a href="https://www.padmapper.com">PadMapper</a>. From the get go, you are greeted with a map of the area you want to look at, which is immediately populated by all the available rentals. It's somewhat overwhelming at first, but by using the tools provided, you can quickly take pins off the map until you get it down to some manageable choices. Save your favorites, check out floor plans and photos, and indicate your interest in the property. One downside &mdash; it appears to only list apartments in large complexes.</p>
<h2>9. Lovely</h2>
<p>Great name. Great site. <a href="https://livelovely.com">Lovely</a> is known as being exceptionally easy to use, simple, and direct. And it really is a soup-to-nuts kind of setup. With Lovely, you cannot only find your ideal apartment from a vast array on the market, but also submit an application through the site. Plus, you can even pay your rent through the site itself! Of course, anything that sounds too good to be true often has a downside. With Lovely, it's scope. Right now, you're limited to the Midwest and the coasts, but as word spreads, so will the range of the site.</p>
<h2>10. Zumper</h2>
<p>What does the name mean? Who knows. But the site (and app) look great, are easy to use, and have a wealth of information. The first question you'll be asked is where you want to move. Type in the area, and you'll get an overview of the town or city, including any annual festivities or notable attractions. You can search on a map, or by the usual parameters (bedrooms, price, amenities, and so on). One excellent feature of <a href="https://www.zumper.com">Zumper</a> is the way it seamlessly integrates with Experian, allowing you to safely and securely submit your credit report along with your application. Highly recommended.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/10-best-tools-for-finding-an-apartment-on-the-cheap">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and HousingTechnologyapartment finderapartmentsappscraigslistmovingrentingwebsitesZillowFri, 21 Oct 2016 09:30:30 +0000Paul Michael1816944 at http://www.wisebread.com10 Most Expensive Zip Codes in the Countryhttp://www.wisebread.com/10-most-expensive-zip-codes-in-the-country
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<p>The biggest expense any of us face is housing. Our mortgage payment eats up a sizeable chunk of the monthly paycheck. But of course, it's not just the size of your home, but the location that can make the difference between something affordable, and something only the <a href="http://www.wisebread.com/3-unbelievable-real-estate-tax-shelters-of-the-rich">richest of the rich</a> can afford. Here are the <a href="http://www.propertyshark.com/Real-Estate-Reports/2016/03/09/top-most-expensive-zip-codes-in-the-us/">10 hot spots in the U.S.</a> right now, and no surprise here, they're all in either New York or California.</p>
<h2>1. Palo Alto, California 94301</h2>
<p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5170/stanford_university.jpg" width="605" height="340" alt="" /></p>
<p>Derived from the Spanish for &quot;tall tree,&quot; Palo Alto was named after a 1,000-year-old redwood tree. Just 35 miles south of San Francisco, and 14 miles north of San Jose, it's in a beautiful location. And the 67,000 residents who live there clearly agree. At over 100 years old, it was the place where early Spanish explorers settled, but is now considered the birthplace of Silicon Valley. It's an exciting mix of tradition and tech. Sounds great, right? Well, it better be, with a median house price of $3.15 million. The average <a href="https://www.incomebyzipcode.com/california/94301">household income in Palo Alto is $185,033</a>.</p>
<h2>2. Atherton, California 94027</h2>
<p>Another idyllic setting south of San Francisco, Atherton was originally known as Fair Oaks when it was founded in 1866. A quick tour of the area will soon reveal why, with a vast array of native live oaks and white oaks, bays, redwoods, cedars, and pines. It has a population of just under 7,000, and contains 2,500 households. But with a median home price of $5.9 million, it's still well out of the range of all but the 1%. However, <a href="https://www.incomebyzipcode.com/california/94027">average household income in this zip is $425,775.</a></p>
<h2>3. Beverly Hills, California 90210</h2>
<p>Anyone who remembers the TV series of the same name knows that this is a place of wealth, fashion, and unrealistic standards of beauty. It's also been featured in countless movies, and the renowned Rodeo Drive is right there &mdash; where you can spend a fortune on brands like Cartier, Fendi, Jimmy Choo, Prada, and Rolex. If you want to live close to that kind of luxury retail, you'll have to fork over some serious cash. The median house price for the area is $3.5 million. Average <a href="https://www.incomebyzipcode.com/california/90210">household income for this zip code is $191,087.</a></p>
<h2>4. New York City, New York 10013</h2>
<p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5170/new_york_city.jpg" width="605" height="340" alt="" /></p>
<p>New York City is a big place, so let's break this down. The 10013 zip is around the Lower Manhattan and Tribeca area, and includes Columbus Park, the Tribeca Performing Arts Center, and SoHo. It's filled with incredible places to eat and drink, plus art galleries, museums, and some very chic little boutique shops. If you plan on moving there, you'll need plenty of money to make it work. The median house price in this zip code is $3.4 million. Staggeringly, average household <a href="https://www.incomebyzipcode.com/newyork/10013">income here is $220,757.</a></p>
<h2>5. Sagaponak, New York 11962</h2>
<p>With a population of just 321 people, Sagaponak is not exactly a hotbed of activity. This village, in the town of Southampton in Suffolk, New York, is at the East End of Long Island. If the name sounds new to you, you probably know it better as The Hamptons (which includes this and several other communities). It's picturesque, full of beautiful green grass, lush trees, and it's right there on the coast. But if you want to live there, get ready to shell out a fortune. The median sales price for a home in the 11962 zip code is a staggering $8.5 million. Celebrities including Jimmy Fallon and Billy Joel live there, although surprisingly, the <a href="https://www.incomebyzipcode.com/newyork/11962">average income for the area is $273,472.</a></p>
<h2>6. Santa Monica, California 90402</h2>
<p>The oceanfront city of Santa Monica includes innumerable attractions, including the Playland Arcade, the Santa Monica Pier, and a whole host of bars, galleries, restaurants and attractions. With its all-year-round perfect climate, it is a magnet for tourists and a welcome place to live. Want to move in? Well, start saving. The median home price here is a cool $3 million, but the <a href="https://www.incomebyzipcode.com/california/90402">average household income is $111,973.</a></p>
<h2>7. Bridgehampton, New York 11932</h2>
<p>With less than 2,000 residents, the hamlet of Bridgehampton is in the town of Southampton, on Long Island. Another community in The Hamptons, it's just what you'd expect. Spectacular views of the coastline, incredible greenery, and a plethora of activities for those with very deep pockets. If you own a yacht, you'd love it here. But of course, you'd also need to stump up the median house price of $2.96 million. The <a href="https://www.incomebyzipcode.com/newyork/11932">average household income here is $134,393</a>.</p>
<h2>8. Newport Beach, California 92662</h2>
<p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5170/newport_beach.jpg" width="605" height="340" alt="" /></p>
<p>&quot;You're on the beach&quot; is a perfect way to describe this beautiful part of California. And, it definitely pushes that angle in all of the promotional materials. You can indulge in sunset cruises, surfing lessons, fishing, swimming, scuba diving, and wine-tasting events on the oceanfront. But all that will cost you. The median home price here is $2.88 million, with the <a href="https://www.incomebyzipcode.com/california/92662">average household income in 92662 being $173,072</a>.</p>
<h2>9. New York City, New York 10007</h2>
<p>We're back in New York City again &mdash; this time just below the area closer to the top of this list. In this part of the city, you'll see the Woolworth Building, St. Paul's Chapel, and the new One World Trade Center. With endless coffee shops, theatres, restaurants, and art galleries, it's got many of the amenities of the more expensive 10013 zip code, but at an average house price of $2.8 million, it's over half a million dollars more affordable! The average <a href="https://www.incomebyzipcode.com/newyork/10007">household income in this part of New York is $430,777</a></p>
<h2>10. Shelter Island Heights, New York 11965</h2>
<p>The last location on the list is another hamlet, although this time, it's not in The Hamptons. In fact, it's commonly referred to as &quot;The Un-Hamptons.&quot; There are less than 1,000 people living here, and under 500 households. It's not exactly a hotspot of frenzied activity though, with hiking, kayaking, and cycling being the most common activities for the locals. A home in Shelter Island Heights will set you back $2.97 million, and the average <a href="https://www.incomebyzipcode.com/newyork/11965">household income here is $140,380</a>.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/10-most-expensive-zip-codes-in-the-country">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and Housingexpensive zip codeshome buyinghouse hunthousing marketzip codesMon, 17 Oct 2016 09:00:07 +0000Paul Michael1813140 at http://www.wisebread.comMy 2016 Budget Challenge: How to Decide When to Sell Your Househttp://www.wisebread.com/my-2016-budget-challenge-how-to-decide-when-to-sell-your-house
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<p><em>[Editor's Note: This is the latest episode in Max Wong's journey to find an extra $31,000 this year. Read the whole series </em><a href="http://www.wisebread.com/topic/max-wongs-budget-0"><em>here</em></a><em>.]</em></p>
<p>Mr. Spendypants and I have been struggling to improve our finances by reorganizing our debt, specifically the loans on our two houses. Because banks use a stricter set of guidelines for assessing risk for rental properties, it has proved impossible for me to restructure the mortgage on my rental property that I own in my own name. So, at the beginning of the summer, we set our sights on refinancing our primary residence that is in Mr. Spendypants' name.</p>
<h2>We've Been Underwater on Our Mortgage for Almost a Decade</h2>
<p>Here's the back story: Mr. Spendypants bought Dinky Manor for $585,000 in 2007, literally the week before the housing market tanked. He hadn't even moved in when he discovered that the property was now underwater. We have been patiently waiting for the market to recover for nine years.</p>
<p>The real estate market in our neighborhood is now crazy. People are buying 400 square foot homes for $400,000 in cash, sight unseen. So, we thought, now is the time to jump at getting a better loan. Zillow appraises our house for over $740,000.</p>
<h2>Those Two Times We Missed the Days of Sub-Prime Lending</h2>
<p>In order to refinance, Dinky Manor has to appraise for $640,000. Alas, Zillow's appraisal of our house is wildly optimistic. Our mortgage broker had two separate appraisals done and both came in at $600,000. Although Dinky Manor measures in at just a smidgen over 1,000 square feet, we're not even the smallest house on the block. Also, our yard is large and gorgeous and has been featured in garden books and on the Sunset Magazine blog. How, in L.A.'s stupid expensive real estate market, are we missing the mark?</p>
<h2>Some of My Best Ideas Are Really Dumb</h2>
<p>In trying to figure out another way to lower our mortgage costs, I had a harebrained idea: I could sell my rental property, that has at least $600,000 in equity, and use the profit to buy Dinky Manor from Mr. Spendypants. We'd lose my future income generating property, but we'd end up owning Dinky Manor free and clear. Without a mortgage payment on either house, we could really start socking away the cash for early retirement.</p>
<p>I called <a href="http://www.wisebread.com/14-reasons-why-an-accountant-is-worth-the-money">my accountant/therapist</a> to get her blessing. &quot;That is a harebrained idea for a couple of reasons,&quot; she stated, flatly. &quot;You guys should come into my office for a financial tuneup.&quot;</p>
<p>When we arrived at my accountant's office she delivered the bad news: If I sell my rental house, I will have to pay between $200,000 to $300,000 in capital gains taxes. Also, even though my name is not on Dinky Manor's deed, I would not be able to buy it from my husband since we file our taxes as a married couple, so in the eyes of the IRS it's my house too.</p>
<p>This is why I will never be successful as a master criminal. All the good financial loopholes have already been taken.</p>
<h2>When Faced With a Financial Decision, Do the Math</h2>
<p>My accountant had another scenario to pitch us: Sell Dinky Manor and move into my rental property as our primary residence. Even if we take a financial hit on the sale of Dinky Manor, the loan on my rental is half that of Dinky Manor. If we continue to live frugally like we've been living this year for <a href="http://www.wisebread.com/topic/max-wongs-budget-0">My 2016 Budget Challenge</a>, we could pay off my house in six years.</p>
<p>Another bonus of this plan: If I sell my rental property, I have to pay capital gains taxes. But in California, when you sell your primary residence, you don't have to pay capital gains on the first $500,000. So, if I move back into my rental house and use it as my primary residence for 24 months, I could then sell it and walk away with a $500,000+ profit.</p>
<p>Mr. Spendypants was shocked by this idea. He had hoped that we could wait out the housing market and flip Dinky Manor for a profit. But when my accountant did the math for him, he realized that we could be debt free and own a house outright in as little as six years, an impossible goal if we keep both houses. While the prospect of financial sustainability in six years is thrilling, the disappointment of only breaking even or even losing money on the sale of Dinky Manor hurt his brain.</p>
<h2>How Do We Add Value to Our House?</h2>
<p>I called my friend Andrew, a real estate agent who specializes in our neighborhood, and explained our situation. He agreed with our accountant's plan to sell Dinky Manor. Even if we lost money on the Dinky Manor sale, the amount we'd save by paying down the mortgage on my house early would more than offset that. Although we probably won't be able to buy another house, ever again, in L.A.'s inflated market, if we wanted another rental property down the road, we could use the equity in my house to buy property in another area.</p>
<p>I asked Andrew if I could hire him to come over and do his own audit of Dinky Manor. Zillow values Dinky Manor at over $740,000. Why did our appraisals come up so short? If we couldn't get our house value up enough for a re-Fi, how would we ever get the value up enough to get the $60,000 down payment back if we sell it?</p>
<p>Andrew spent over two hours looking at our house and yard. He also brought over some comps of similar homes that had sold in a one-mile radius of our house. His assessment: Dinky Manor is a dump. (Yes. Only in Los Angeles can a 1,000 square foot dump appraise for only $600,000). The appraisers had negatively compared our 1937 bungalow as a fixer-upper to new homes with Ikea kitchen cabinets and freshly installed privacy fencing. He gave me an extensive To Do list of home projects that would improve the house's value. If we fixed everything on his list, he would be able to put the house on the market with a starting price of $699,000.</p>
<p>In order to get to this $699,000 price, we are going to have to repaint the house, build a deck, and do a complete redo of the kitchen, bathroom, and roof. This will cost between $40,000 and $60,000 depending on how lucky we get with sourcing the building materials. The renovation will be much more efficient and less stressful if we are not living in a house without a working kitchen and bathroom. If we empty out Dinky Manor before construction, we could possibly finish all the projects on the To Do list in one month (but I'm scheduling for two months).</p>
<p>It's only October, and already I have My 2017 Budget Challenge in place. If we want to be mortgage free ASAP then here's our agenda for the next year:</p>
<ol>
<li>Save up at least six months of living expenses, because we will have to carry the mortgage of both homes during this process.<br />
&nbsp;</li>
<li>Give my amazing renters, who have lovingly cared for my house for the past five years, 90 days notice so they have ample time to find a new pad.<br />
&nbsp;</li>
<li>Move into my house the second the renters move out.<br />
&nbsp;</li>
<li>Because we don't have the savings to pay for the renovations and pay two mortgages simultaneously, we will have to take out a $60,000 Home Equity Line of Credit on my house (based on its insane amount of equity).<br />
&nbsp;</li>
<li>Renovate Dinky Manor.<br />
&nbsp;</li>
<li>Put Dinky Manor on the Market.<br />
&nbsp;</li>
<li>Sell Dinky Manor. If there is any profit at all (fingers crossed) from the sale, it will be used to pay down the Home Equity Line of Credit.<br />
&nbsp;</li>
<li>Refinance my house (now our primary residence) to get a better interest rate.<br />
&nbsp;</li>
<li>Aggressively work toward paying down the Home Equity Line of Credit and the mortgage of our one house.</li>
</ol>
<p>Looking at this list of things to accomplish is heart attack inducing. And, if it were up to only me, I'd probably have Andrew sell Dinky Manor as-is and eat the cost of the down payment just to avoid a year's worth of hassle and stress. But, Dinky Manor is Mr. Spendypants' asset, so he ultimately gets to call the shots on this one. This is financially risky. Worst-case scenario, we could lose $120,000 and a year of our life to this project. Best-case scenario, we could make $200,000 and lose a year of our life to this project. Either way, we will no longer have a $585,000 loan to pay down. We might lose a real estate battle, but could still win the war.</p>
<p>A few days after giving me his advice (for free), Andrew called me with a job offer. He just started his own boutique real estate brokerage. Would I be interested in working a few hours a week, helping him set up his new company? Of course I said yes. Now I am getting paid to learn about real estate so I can be that much more prepared when it comes time to sell Dinky Manor.</p>
<h2>Progress So Far</h2>
<p>My mechanic just called me. &quot;I have good news and bad news to tell you,&quot; he said in that Swedish accent that sounds like lingonberry jam smells. &quot;The good news is that you passed your smog test. The bad news is that you can drive your car for another two years.&quot;</p>
<p>Ha ha.</p>
<p>Even though Mr. Spendypants earned an extra $800 this month DJing a party, <a href="http://www.wisebread.com/my-2016-budget-challenge-everything-breaks">the car repairs</a> involved in getting my car to pass the smog test cost $700. So at the end of the month, he only came out $100 ahead on additional earnings. Boo.</p>
<p>I made $375 this month working for Andrew, $450 for writing, and $630 selling jam and honey at a local craft and food fair for a total of $1,455 extra.</p>
<p>Even with the additional earnings, as of today we have only have $10,741.51 in our savings account out of the $31,000 that we want to have by the end of the year.</p>
<p>Will we make our goal?</p>
<p><strong>Goal:</strong>&nbsp;$31,000</p>
<p><strong>Amount Raised</strong>:&nbsp;$23,595.17</p>
<p><strong>Amount Spent:</strong>&nbsp;$12,853.66</p>
<p><strong>Amount Left to Go:</strong>&nbsp;$20,258.49</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/max-wong">Max Wong</a> of <a href="http://www.wisebread.com/my-2016-budget-challenge-how-to-decide-when-to-sell-your-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Frugal LivingReal Estate and Housingdownsizinglendingmarket crashmax wongs budgetmortgagesrefinancingrental propertyselling houseunderwater mortgageFri, 14 Oct 2016 10:00:06 +0000Max Wong1812051 at http://www.wisebread.comThe Real Cost of Moving to Canada (If That's Your Post-Election Plan)http://www.wisebread.com/the-real-cost-of-moving-to-canada-if-thats-your-post-election-plan
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<p>The odds are high that you don't like either Hillary Clinton or Donald Trump. According to an ABC News/Washington Post poll released in late August, 56% of U.S. adults viewed Hillary Clinton unfavorably. The same poll found that 63% said the same about Donald Trump.</p>
<p>No matter who wins the presidential election this November, a lot of people are going to be upset. You might even have heard people claiming that they'd flee to Canada if Trump &mdash; or Clinton &mdash; wins. Maybe you've even made this boast yourself.</p>
<p>But you might be surprised to learn that life can get costly over the border. Here is a quick look at what you'll pay when you flee to our neighbors to the north after Nov. 8.</p>
<h2>Conversion Rate</h2>
<p>First, a bit of good news. One U.S. dollar as of Oct. 6 was equal to $1.32 in Canada. So if you head north with $30,000, you'll have a bit more than $39,640 once you cross the U.S./Canadian border.</p>
<h2>Taxes</h2>
<p>Hate paying taxes in the United States? Well, you won't like it in Canada, either. The Fraser Institute think tank reported that the average Canadian family spent $34,154 in taxes in 2015. By comparison, NerdWallet in 2015 reported that the average American family paid about $14,000 in taxes. That figure, like the Canadian one, includes real estate, income, and sales taxes.</p>
<p>That difference looks less imposing when you factor in the U.S.-Canada currency conversion rate. In Canadian dollars, the average U.S. family in 2015 paid nearly $26,000 in taxes. That is still quite a bit lower than in Canada.</p>
<p>According to the Fraser Institute, the average Canadian bill for income taxes collected by governments in 2015 was $10,616, while payroll and health taxes came out to an average of $17,160.</p>
<h2>Housing</h2>
<p>Homes are expensive in Canada. The Real Estate Board of Greater Vancouver said that the average price of a single-family detached home in Vancouver rose to $1.58 million in September. That comes out to about $1.19 million in U.S. currency.</p>
<p>And Vancouver isn't the only expensive place to buy a home in Canada. The Toronto Real Estate Board said that the average selling price for all home types in Toronto came out to $710,410 in August (about $537,000 in U.S. dollars).</p>
<p>The average selling price for all Canadian homes sold in August of 2016 was $456,722, according to the Canadian Real Estate Association. That comes out to about $345,000 in U.S. currency. In comparison, the National Association of Realtors said that the average sales price for all homes sold in the United States in August was $240,200.</p>
<h2>Renting an Apartment</h2>
<p>So maybe you'll rent an apartment instead. That's pretty costly, too.</p>
<p>According to RentGorilla, the average rent for a one-bedroom apartment in Vancouver in September of 2016 came in at $2,445 a month, equal to about $1,850 in the United States. In Toronto, the average two-bedroom rent was $1,502 the same month, equal to $1,136 in the United States.</p>
<p>In Ottawa, the average two-bedroom rent was $1,235, while in Montreal it stood at $852. Those last two, by the way, are quite affordable, coming out to $934 and about $644 respectively in the United States.</p>
<h2>Goods and Services</h2>
<p>What about basic necessities, everything from a gallon of gas to a gallon of milk? You'll find that with the conversion factor, prices in Canada are similar to what you'd pay for the same items in the United States.</p>
<p>Consider a gallon of gasoline. According to the Expatistan Cost of Living Index, a liter of gas &mdash; which is equal to one quarter of a gallon &mdash; came out to $1.20 in Vancouver. That means a gallon of gas would cost an average of $4.80 in the city. That comes out to $3.63 in U.S. currency, a bit higher than what you'd pay at the pump in most U.S. cities today.</p>
<p>Two liters of Coca-Cola, though, come out to an average of $2.48 in Toronto, according to Expatistan. That comes out to $1.88 in U.S. money. A pair of jeans here costs an average of $68, or $51.46 in U.S. currency.</p>
<p>In Montreal, a 40-inch flat screen TV costs an average of $509, according to Expatistan. That comes out to about $385 in U.S. money, while a pair of athletic shoes sell for an average of $110 in Montreal, equal to about $83 in the United States.</p>
<h2>Cost-of-Living Comparisons</h2>
<p>Expatistan compiled its own cost-of-living comparisons between Canadian cities and several in the United States. As you'll see, if you live in higher-priced areas of the United States, you might actually find it cheaper to live in Canada.</p>
<p>For instance, the cost of living in Toronto is 9% cheaper than it is in Chicago, according to Expatistan. And it's 32% cheaper to live there than it is in New York City. On the other hand, Toronto's cost of living is 24% more expensive than it is in Omaha and 30% more than in Iowa City.</p>
<p>Expatistan estimates that it is 35% cheaper to live in Vancouver than it is San Francisco and 15% cheaper than Seattle. However, it is 15% more expensive to live in Vancouver than it is Wichita and 7% more expensive than living in Columbus. So much like the election, it's really up to you.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/the-real-cost-of-moving-to-canada-if-thats-your-post-election-plan">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Personal FinanceReal Estate and HousingCanadaClintonconversion ratescost of livingelection 2016expatspoliticsrentingrunning awaytaxestrumpFri, 14 Oct 2016 09:01:03 +0000Dan Rafter1812615 at http://www.wisebread.com4 Ways to Buy a House Without a Mortgagehttp://www.wisebread.com/4-ways-to-buy-a-house-without-a-mortgage
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<p>Although mortgages are a common way to purchase a home, you can only get one if you qualify. The qualifications include an acceptable credit score, a sufficient down payment, and meeting a bank's income and employment requirements. And let's not forget, every mortgage charges interest, which increases how much you pay in the long run.</p>
<p>The good news is that a mortgage isn't the only way to purchase a house. If you think outside the box, you can possibly pull off a home purchase without a costly loan.</p>
<h2>1. Live Off One Income</h2>
<p>Some people like the idea of paying cash for a house, but don't think it's a reality. If you're a two-income household, one method for getting a home without a mortgage involves living off a single income for a few years.</p>
<p>If you and your partner work and earn a decent salary &mdash; and live in an affordable area &mdash; you might be able to save enough for a cash purchase by keeping your life as simple as possible and subsisting off one income. This approach allows you to save 100% of the other person's take-home salary. So if you both earn $30,000 a year, rather than maintain a lifestyle requiring $60,000 a year, live frugally and save the other half of your combined income. In six years, you'll have approximately $180,000 cash for a home purchase.</p>
<p>Of course, living simpler is much easier said than done. To make it work, consider renting out a room in your house or apartment to help cover expenses, or you can rent a room from family or friends. Other options include skipping vacations, spending less on entertainment, and sharing a car. These are sacrifices that pay off in due time.</p>
<h2>2. Sell Your Home and Purchase Another One</h2>
<p>If you're thinking about downsizing and you have plenty of equity in your current home, another option is selling your home, taking the profit, and moving to a location with a lower cost of living.</p>
<p>This works if you're currently living in an expensive area but thinking of moving to a location where you can get more house for your money. Let's say you sell your current home and walk away with a profit of $150,000. This could be exactly what you need to pay cash for a new property in a different part of the country.</p>
<h2>3. Get an Investor</h2>
<p>Then again, maybe you're not looking for a primary residence, but rather an investment property. Getting a mortgage for an investment property is tricky. Many lenders require a higher credit score for investment properties, plus you'll need a higher down payment and cash to fix up the property.</p>
<p>What you can do, however, is seek out an investor to cover the expense of buying and improving the home. Some investors will pay cash for properties and provide funds to rehab the property. Once you fix up and flip the home for a profit, you split the proceeds with your investor.</p>
<h2>4. Use Seller Financing</h2>
<p>If you can't get a traditional mortgage loan, seller financing is another option. This can work if your credit score is too low to qualify for traditional financing, or if you have a short employment record and can't qualify for a bank mortgage. Even if you have enough income to qualify for a home loan, most banks require at least 24 months of consecutive employment before approving an application.</p>
<p>Sellers who offer seller financing are more flexible. You sign a promissory note saying you'll repay the loan and then the seller signs over the deed to the house. You become the owner of the house, but the seller is the bank, so you'll make payments to the seller every month. Since you're the legal owner, you can still sell or refinance the property.</p>
<p>This type of financing typically has a short-term of three to five years with a balloon payment for the remaining balance due at the end of the term. Seller financing gives you time to improve your credit or financial situation so you can refinance into a traditional mortgage, at which point the seller gets their money.</p>
<p>But while this mortgage alternative can work in theory, the hardest part is finding a willing seller. Not all sellers will agree to this type of financing. The ideal seller is someone who has plenty of home equity and zero mortgage.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/4-ways-to-buy-a-house-without-a-mortgage">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2">
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</div> </div><br/></br>Real Estate and Housingbuyersfinancinghouse huntingincomeinvestormortgagesnew housesellersThu, 06 Oct 2016 10:00:06 +0000Mikey Rox1805233 at http://www.wisebread.comHow to House Hunt Without Leaving Your Couchhttp://www.wisebread.com/how-to-house-hunt-without-leaving-your-couch
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<p>Buying a new home can be exciting, but the process of hunting for one isn't always aces. Between work and personal obligations, your time may be too tight to drive from one bad house to another, just to be disappointed after each walk-through. Yes, it's time-consuming and exhausting, but the search has become a bit easier. With advances in technology, you can hunt for and <a href="http://www.wisebread.com/5-negotiation-tricks-that-ll-win-a-home-bidding-war" target="_blank">purchase a home</a> without ever leaving your own house these days. Here's what you need to do.</p>
<h2>1. Check Out Mortgage Calculators</h2>
<p>Using a mortgage calculator doesn't take the place of speaking with an actual lender and getting preapproved for a home loan. But a mortgage calculator is an excellent starting point because you can plug in different variables &mdash; such as an estimated interest rate, home price, and mortgage term &mdash; to learn how much you can afford to spend on a property.</p>
<p>Some calculators only estimate principal and interest, whereas more<a href="https://www.calcxml.com/calculators/mortgage-calculator"> advanced calculators include estimations for taxes</a>, insurance, and PMI. As long as you know the average prices of homes in your area, you can use a calculator to assess whether you can realistically afford to buy in a particular area. Calculators can also compare the cost of renting versus buying.</p>
<h2>2. Compare Mortgage Options Online</h2>
<p>It isn't enough to use a mortgage calculator; you also need to know your home loan options. Nowadays, shopping for a home loan and comparing mortgages has never been easier. Websites like Realtor.com and LendingTree.com allow borrowers to compare mortgages offered by different online lenders. You can even request free rate quotes directly from local lenders.</p>
<p>Before purchasing a home, always get quotes from at least two or three lenders to ensure you're getting the best deal. Buying a home is expensive, but working with the right lender can help you save on interest and closing costs.</p>
<h2>3. Research the Multiple Listing Service</h2>
<p>The multiple listing service, or MLS, is a website real estate agents use to post their property listings. This is an excellent tool for house hunting without leaving your house.</p>
<p>Before modern-day buyers had access to this invaluable tool, finding a property meant spending hours driving through neighborhoods in search of &quot;For Sale&quot; signs. This was tedious and prolonged the home search. The multiple listing service lets you search properties online based on specific parameters. The search results provide a listing of homes matching your criteria.</p>
<p>You can search homes located within a particular ZIP code or price range, and you can narrow the results according to number of bathrooms or bedrooms. Not only can you find properties, some websites offer information on local realtors. If you're not working with a real estate agent, you can find contact information for agents and interview a few. Some websites &mdash; such as Zillow &mdash; have a feature that lets you read real estate agent reviews.</p>
<p>Be aware, however, that the MLS doesn't have information on every house for sale in the area. Some sellers don't list with an agent. Therefore, you should also search other reputable websites, including FSBO.com and Owners.com.</p>
<h2>4. Take a Virtual Tour of Properties</h2>
<p>One painstaking thing about buying a house is spending hours touring properties with your real estate agent. It can take hours to drive from one property to the next, and it often takes several days to tour every property your realtor pulls.</p>
<p>What if there were a way to speed up the process? Better yet, what if you could tour properties without physically being there? This is becoming more and more possible with virtual reality technology.</p>
<p>This feature isn't available for every property or in every housing market. But if you're fortunate enough to take advantage of virtual home viewing, house hunting can become less of a chore. Wearing a virtual reality headset, you can take a 360-degree tour of properties for a buying experience unlike any other. And since you're not driving from property to property, you'll save time and tour more homes in a shorter window.</p>
<h2>5. Set Up Email Alerts</h2>
<p>The local real estate market changes from day to day. Homes are constantly being removed from and added to the MLS. To stay on top of what's happening in your community, you would have to check online real estate listings every single day. And unfortunately, your schedule might not allow this type of commitment.</p>
<p>To make the search easier, go to different real estate websites and sign up for email notification. Based on your preferences, you'll receive an email whenever new listings matching your search criteria and price range appear on the site. You'll stay in the loop and learn about new property listings without having to drive up and down the neighborhood.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/how-to-house-hunt-without-leaving-your-couch">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1">
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</div> </div><br/></br>Real Estate and Housingcalculatorscomparinghouse huntingmlsmortgagesmultiple listing servicesnew houseonline toolsreal estate agentsvirtual realityTue, 04 Oct 2016 09:00:13 +0000Mikey Rox1805036 at http://www.wisebread.comHow Much Are Pricey Home Upgrades Really Worth?http://www.wisebread.com/how-much-are-pricey-home-upgrades-really-worth
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<p>&quot;Real estate investing, even on a very small scale, remains a tried and true means of building an individual's cash flow and wealth,&quot; writes Robert Kiyosaki author of <a href="http://www.amazon.com/gp/product/1612680011/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1612680011&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=NPDRUSEI6ILRUE7S">Rich Dad, Poor Dad</a>. (See also: <a href="http://www.wisebread.com/the-8-classic-personal-finance-books-you-must-read">The 8 Classic Personal Finance Books You Must Read</a>)</p>
<p>But like with any other type of investment, you need to know what you're doing, or you'll end up eating your shirt. For example, you may think that some high-end projects, such as adding a deck that offers a majestic view or doing an upscale bathroom remodel, may provide you a great return on your real estate investment. However, the evidence from the <a href="http://www.remodeling.hw.net/cost-vs-value/2016/trends">2016 Remodeling Cost vs. Value report from the National Association of Realtors</a> (NAR) shows the contrary.</p>
<p>By taking a look at the project costs in 102 U.S. real estate markets, the NAR report provides a comprehensive review of what features provide you the best bang for your real estate buck. Let's round up a handful of &quot;features&quot; that can really boost the cost of a home, but may not actually deliver a lot of value. And we'll look at the projects you should take on, instead.</p>
<h2>1. Bathroom Addition</h2>
<p>The idea of having an extra bathroom so that your family members don't have to sit around for others to get ready for the day may sound like a great idea. But adding a full 6-by-8-foot midrange bathroom to your home only recoups just <a href="http://www.remodeling.hw.net/cost-vs-value/bathroom-addition?y=2016">under 60%</a> of your total cost, on average. In 2016, the national average cost for a midrange bathroom addition was $42,333, but offers only $23,727 in actual value &mdash; in other words, a net loss. Even worse, the NAR reported that only one out of the 102 U.S. markets provided a 100% return on this project on that year.</p>
<p>Going &quot;upscale&quot; on a bathroom addition doesn't fare well either. In 2016, the national average resale value for an upscale bathroom addition was only 0.5% better than that for a midrange bathroom addition.</p>
<p><strong>What to Do Instead:</strong> Keep it simple and midrange. A bathroom remodel provides a better resale value than an addition. A midrange bathroom addition and a midrange bathroom remodel recoup 56.2% and 65.7%, respectively. Doing an upscale bathroom remodel only improves the resale value by 1% over the one offered by an upscale bathroom addition. Also, the cost advantage of midrange bathroom remodel ($24,000) over an addition allows you to pay back any financing more quickly.</p>
<h2>2. Composite Deck Addition</h2>
<p>Enjoying a hot cup of coffee by a bonfire during the fall, or reading an intriguing novel while getting a tan during the summer out on your deck sounds like it's worth every penny. But, the financial math doesn't add up.</p>
<p>Adding a 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers would run you a national average between <a href="http://www.remodeling.hw.net/cost-vs-value/2016/west-south-central/">$16,798 to $37,943</a>, depending on the scope of your project. The resale value of a composite deck addition would only recoup $10,819 to $21,877, according to national averages.</p>
<p><strong>What to Do Instead: </strong>If you really want to have that deck, go with wood instead of composite. Adding a midrange deck made out of wood provides a resale value over 10% higher than that of composite.</p>
<h2>3. Backup Power Generator</h2>
<p>We all want to be prepared for disaster, but the addition of backup power generator runs at $12,712, according to national averages. Worse, this project only recouped an average of <a href="http://www.remodeling.hw.net/cost-vs-value/backup-power-generator?y=2016">59.4%</a> of its cost in 2016.</p>
<p><strong>What to Do Instead: </strong>Forget about backing up your power and focus on replacing your entry door. Replacing the entry door to your home is a good idea because it can improve the security and ability to withstand the elements (and zombies!) from your home. Additionally, the right door can enhance the look of your home. While the in 2016, the cost of a midrange entry door replacement recouped <a href="http://www.remodeling.hw.net/cost-vs-value/entry-door-replacement-steel?y=2016">91.1%</a> of its cost, in past years this project has recouped up to 128.9% of its cost! In the 2015 edition of the NAR report, entry door replacement received the top rank nationally in terms of cost recouped (<a href="http://realtormag.realtor.org/home-and-design/cost-vs-value/article/2015/01/2015-remodeling-cost-vs-value-less-more">101.8%</a>). That year' survey revealed that a new steel door was the least expensive project and provided the best payback out of all projects across the nation.</p>
<p>Additionally, eligible ENERGY STAR doors can qualify you for up<a href="http://www.energystar.gov/products/building_products/residential_windows_doors_and_skylights/tax_credit"> to $500 in energy efficiency tax credits</a>.</p>
<h2>The Bottom Line: The Simpler the Project, the Bigger the Return</h2>
<p>Currently in its tenth year, the <a href="http://www.remodeling.hw.net/cost-vs-value/2016/trends">2016 NAR report</a> indicates that &quot;the simpler and lower-cost the project, the bigger its cost-value ratio.&quot;</p>
<p>In 2016, four out of the top five projects that ranked best for cost recouped had a total cost under $5,000. These costs estimates were made assuming that you hired a professional contractor to complete the projects. Regardless of your budget, you'd be better off tackling two or more affordable projects that recoup at least 90% of their value, than just one high-end one with a recoup value under 60%. If you have great DIY handyman or negotiation skills, you could improve your investment return even further. (See also: <a href="http://www.wisebread.com/4-times-you-should-splurge-and-hire-a-pro">4 Times You Should Splurge and Hire a Pro</a>)</p>
<p>As you can see from these sample projects, replacements cost less than alternative home renovation projects, such as a kitchen or bathroom renovation, and provide the best bang for your buck. Another home renovation project that can be completed within three days and that provides a high return on investment is garage door replacement. In 2016, a midrange garage door replacement would recoup about 91.5% of its cost.</p>
<p><em>How are you improving the market value of your property?</em></p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/how-much-are-pricey-home-upgrades-really-worth">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2">
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</div> </div><br/></br>Real Estate and HousingDIYhome renovationHome repairinvestingreal estateMon, 03 Oct 2016 10:30:06 +0000Damian Davila1802138 at http://www.wisebread.comThese Are the 7 Features Home Buyers Want Mosthttp://www.wisebread.com/these-are-the-7-features-home-buyers-want-most
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<p>Interested in buying a new home? It's a good idea to be aware of what new homebuyers are looking for. I interviewed Markus Brown, a Realtor in Orange County, California, about what he sees buyers looking for in potential new homes. The following features are currently generating a lot of demand, which may potentially translate to higher home values.</p>
<h2>1. An Open Floor Plan</h2>
<p>The days of compartmentalized rooms all separated by walls and doors are gone, and the era of <a href="https://www.newhomesource.com/resourcecenter/articles/top-10-features-home-buyers-want">connected living</a> continues to be one of top new home trends. Specifically, buyers &quot;want the kitchen to be open to the family room, which creates the &quot;great room&quot; as it's most typically defined,&quot; says Brown. Homebuyers are also looking for an open floor plan kitchen, as it allows people to flow to and from the heart of the home during gatherings.</p>
<h2>2. Hardwood Floors</h2>
<p>Forget the wall-to-wall carpet, today's homebuyers are looking for <a href="http://eyeonhousing.org/2016/03/housing-preferences-across-generations-part-i/">hardwood floors</a> on the main floor of the home, according to the National Association of Home Builders. Hardwood flooring looks especially beautiful when flowing throughout an open floor plan.</p>
<h2>3. A Modern Kitchen</h2>
<p>New homebuyers are looking not just for an updated kitchen, but a <a href="http://www.inman.com/2016/02/16/10-key-design-trends-buyers-want-sellers-need-2016/">modern kitchen design</a> that hits the latest trends. Granite continues to trend, but the pattern in the granite tends to be characterized by more &quot;movement and flow,&quot; according to Brown, as opposed to a busy, speckled look. Quartz aggregates are a popular alternative for countertops. Floor tile has been growing in size, with large rectangular tiles (and fewer grout lines) leading the trends. Keeping hardwood flooring flowing throughout the kitchen and living spaces is also very popular.</p>
<p>The trendiest kitchens have a large island that doubles as an eating space, combining cooking and eating/entertaining in one feature. Open shelving has seen a resurgence in interest, but it can be a polarizing feature that some love and some don't.</p>
<p>Brown points out that modern backsplash finishes are important, and he has seen a trend toward the &quot;subway tile patterns that were popular in the 20s and 30s.&quot;&nbsp;Pullout shelves and self-closing doors in the kitchen are also a plus.</p>
<h2>4. Plenty of Storage</h2>
<p>Along with an open floor plan comes a need for ample storage to keep those open spaces clutter free. New homebuyers are looking for pantries, linen closets, and storage areas such as a separate laundry room, mudroom, and cabinetry in the garage to help them stay organized and to keep the clutter out of sight. In fact, the most recent survey by the <a href="http://eyeonhousing.org/2016/03/housing-preferences-across-generations-part-i/">National Association of Home Builders</a> (NAHB) reports that 92% of buyers want a laundry room, making it the most desired feature of a new home.</p>
<h2>5. Multi-Generational Living</h2>
<p>Many new homebuyers appreciate the possibility to house an older parent or family member, if not full-time, at least part-time with comfortable guest quarters. A guest room on the ground floor with a full bathroom is one of the features that makes multigenerational living more comfortable for everyone.</p>
<h2>6. Multi-Functional Space</h2>
<p>Something many new homebuyers are looking for is a &quot;homework loft,&quot; &quot;gaming loft,&quot; or some kind of multifunctional space within the home. This could be a desk located on a second floor loft outside the bedrooms, or an area off the living room or kitchen which can be used for various needs. &quot;The loft and great room are mutually dependent in many ways,&quot; says Brown, because along with greater open space comes a need for a place for kids to hang out separately from adults.</p>
<h2>7. Indoor-Outdoor Living</h2>
<p>Today's homebuyers are looking for ways to incorporate the outdoors into their daily lives. Millennials and younger buyers, in particular, are <a href="http://eyeonhousing.org/2016/03/housing-preferences-across-generations-part-i/">increasingly demanding a patio</a> and multiple outdoor areas. Outdoor living space also increases the functional square footage of a home. Having an outdoor kitchen and entertaining space can be very attractive to new homebuyers. Sliding doors or French doors leading to a large patio that encourages flow between indoors and outdoors are often coveted features.</p>
<p>The &quot;California room&quot; or &quot;outdoor living room&quot; is an increasingly popular concept, according to Brown. A California room is a space that seamlessly blends indoor and outdoor living, usually comprised of a covered patio or sunroom, comfortable furnishings, and easy access to both inside and outside.</p>
<h2>8. Energy Efficiency and Eco-Conscious Living</h2>
<p>Energy efficiency is a feature that is becoming increasingly important. Energy Star rated appliances, windows, and an Energy Star rated whole home were desired by <a href="http://eyeonhousing.org/2016/03/housing-preferences-across-generations-part-i/">over 80%</a> of new homebuyers. Features like a whole house fan, solar &quot;readiness&quot; (infrastructure in place for solar panels), solar water heater, heat pump heater/air conditioner, and &quot;smart&quot; thermostats can all appeal to the eco-conscious buyer. &quot;In certain areas of the country,&quot; notes Brown, &quot;drought-tolerant and low-maintenance landscaping are also important.&quot;</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/camilla-cheung">Camilla Cheung</a> of <a href="http://www.wisebread.com/these-are-the-7-features-home-buyers-want-most">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2">
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</div> </div><br/></br>HomeReal Estate and Housingappliancesfeaturesfloor planshomebuyershomeownershousing marketinterior designmodernnew houseThu, 29 Sep 2016 09:00:07 +0000Camilla Cheung1800745 at http://www.wisebread.com5 Negotiation Tricks That’ll Win a Home Bidding Warhttp://www.wisebread.com/5-negotiation-tricks-that-ll-win-a-home-bidding-war
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<p>If you're in the market for a new home, you might have discovered a frustrating truth by now: There aren't as many homes available for sale these days.</p>
<p>The National Association of Realtors reported at the end of July, there were 2.13 million existing homes available for sale across the country. That might seem like a big number, but that figure is actually 5.8% lower than during the same month one year ago. And the inventory of homes for sale has fallen for 14 straight months.</p>
<p>This means that when you do find a home that you'd like to buy, you might be bidding against other potential buyers who want the same property.</p>
<p>How do you increase your odds that you'll actually win such a bidding war? Here are five tips that can make a difference:</p>
<h2>1. Get Pre-Approved</h2>
<p>The single most important step in winning a bidding war is to make sure that you are preapproved for a mortgage loan.</p>
<p>In a preapproval, a mortgage lender will run your credit and ask for you to prove your monthly income and debts. You'll have to send your lender such documents as your two most recent paycheck stubs, last two bank statements, and last two tax returns. Your lender can then determine how much money it is willing to loan you for a mortgage. To close the process, the lender will send you a preapproval letter stating that it is willing to loan you a certain amount of dollars.</p>
<p>Having this preapproval letter makes you a stronger buyer. A seller knows that you can qualify for a mortgage loan, and that the home sale is less likely to fall through if the seller accepts your offer. If a seller has to choose between a preapproved buyer and one who's never met with a lender? The odds are high that the seller will choose the buyer who boasts that preapproval letter.</p>
<h2>2. Make a Full-Price Offer</h2>
<p>In the hottest housing markets across the country, a growing number of sellers aren't just juggling offers for their homes, they're juggling full-price offers.</p>
<p>Traditionally, buyers and sellers have haggled over a home's final sales price, with sellers usually lopping at least $5,000 or so off their asking price. But in today's low-inventory markets, this isn't always the case. If you fall in love with a home, be prepared to pay full listing price for it. If you don't, the buyer behind you might be happy to do so.</p>
<p>And you can bet that the seller will gladly accept that full-price offer while ignoring yours.</p>
<h2>3. Go All In</h2>
<p>For the best homes in the best neighborhoods, you might have to make an even bigger financial commitment to win a home: Instead of just making a full-price offer, you might have to make a bid even higher than the residence's list price.</p>
<p>This sounds ridiculous. Why, after all, would you ever pay more for a home than what the seller has actually requested? But if you are competing against several other buyers for a home, the winning bid might actually rise over the home's original listing price.</p>
<p>You'll have to determine if you want the residence badly enough to make the unusual move of paying more than the home's original sales price.</p>
<h2>4. Offer More Earnest Money</h2>
<p>Sellers often request that buyers put down what is known as earnest money when they make an offer on their home. This earnest money &mdash; often 1% of a home's purchase price &mdash; shows that buyers are serious about purchasing a residence. It is usually nonrefundable if buyers walk away from an offer.</p>
<p>If you want to make a good impression on a seller, come up with a larger earnest money deposit. This will prove to the seller that you are especially eager to buy their home.</p>
<h2>5. Be Flexible With Move-In Dates</h2>
<p>Many sellers can't move out of their homes as quickly as buyers want. If you're willing, though, to be flexible with your move-in date, you might be able to win out over bidders who are not as willing to compromise.</p>
<p>Make it clear to sellers that you are willing to move in whenever it's most convenient for them. Making life easier for the sellers could pay off big when you're battling other buyers for a property.</p>
<br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-negotiation-tricks-that-ll-win-a-home-bidding-war">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2">
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</div> </div><br/></br>Real Estate and Housingasking pricebargainingbidding warhome offerhomebuyersmortgagesmovingnew homepreapprovalWed, 28 Sep 2016 09:00:05 +0000Dan Rafter1796739 at http://www.wisebread.com